The Founder’s Development Agreement—10 Questions

by IdeaTransfer on May 22, 2011

In most firms where we have consulted on succession, the founders have too many tentative ideas about the future they want for the business and for themselves.

Nothing clear enough to call it a vision.  Not enough emotion invested yet to call it a dream.  Certainly not enough substance to call it a goal.  But even as unformed as it might be, they act on it—more like driving on a dead-end road in the fog.

For most the thought of retiring is impossible, but they wouldn’t mind winding down to part time—with full time pay.  Some of them see other mountains to climb or long suppressed desires to fulfill.  The most common theme we have heard is the desire to just stay in the game—to build out their networks and take on new roles for their businesses and new projects for their communities.

It’s comfortable for founders to keep their options open their future a little fuzzy.  But it is a disaster in the making for recruiting and retaining successors.

Most founders think the succession plan is about the development of the successor.  Not true.  Founders need concrete goals and need to prepare now to achieve them  Without a Founder’s Development Agreement, successors don’t see how they step into command of the firm because they don’t see how the founders will step away from it.

The Founder Development Agreement articulates the founder’s goals and specifies the changes the founder has to complete to achieve them.  Here are 10 questions that successors should ask founders in order to start the agreement writing process.

  1. What is your mental picture of your workstyle/lifestyle as you reduce your involvement in the firm?
  2. In an ideal world what would your new role in the firm be?
  3. What do you see you have to accomplish to make that ideal picture real?
  4. What is the timetable for your learning curve and does it track with mine?
  5. What changes will that timetable necessitate inside the firm to assure your goals?
  6. What obstacles to achieving that ideal picture concern you today?
  7. How do you see the company adapting to those changes?
  8. What changes do you foresee inside or outside the firm that would require contingency plans?
  9. What’s the best way to critically assess progress—objective metrics and subjective observation?
  10. How do you see us working together to effectively and confidently reach our mutual goals?

So, founders and successors out there—how does the concept of Development Agreements sound to you?  Do you have any experience with it?  Would you be willing to share your thoughts and advice with the rest of us?  Please add your comments.

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